Success stories are regular features of our Motley Fool Rule Your Retirement newsletter service, where we share profiles of people who have become financially independent. One of the most remarkable stories we've come across is that of Billy and Akaisha Kaderli. At age 38, they left their fast-track lives and started traveling the world. We caught up with them in Chapala, Mexico, where Billy and Akaisha comment on how they see the future of retirement.
What we have learned in our almost two decades of financial independence is that the perfect time for retirement doesn't exist. Things change, and sometimes radically. There simply are no guarantees.
From our point of view, a full and rich retirement is still possible for many people even in these trying financial times. It will take personal flexibility in how one's retirement is defined, as well as self-discipline and commitment to making one's dream happen.
Many potential retirees will find themselves working part time to supplement their retirement lifestyle and perhaps to obtain a medical care plan. They may work from home in a virtual style of employment, make money from their hobby, or take advantage of a less stressful second-career opportunity.
Medical tourism will become more commonplace, as corporations look for financial alternatives to providing health care for their employees. As this idea becomes more familiar, retirees and potential retirees will consider this type of health care as a viable option if they are underinsured or if their own health care plan is lacking or too expensive to maintain.
Moving to more affordable countries such as Mexico, Panama, Ecuador, The Philippines, Costa Rica, or Thailand will also become more attractive to those whose portfolios were compromised in this last financial meltdown. One can live a reasonably comfortable lifestyle in these countries for far less than in the United States or Canada.
Grander retirement dreams may be scaled back, but that is not necessarily a bad thing. Less can be more when one's retirement money is spent for living rather than for maintaining things.
If one's future retirement life is based upon the idea of keeping the same level of spending after there is no longer a paycheck coming in, the current financial challenges we are seeing today will come as a huge threat and shock. The days ahead could be ones of dread and fear. But if you have learned to live below your means, have kept your monthly expenses reasonably low, and have not loaded up with huge amounts of consumer debt, market days such as the ones recently are like an uncomfortable bump in the road, not a life-defining event.
People will still retire, but how people actually live life away from the working world will continue to evolve as people grapple with the diminished size of their portfolios. Creativity, flexibility, and the trend toward simple living will take on more value as their use will provide options for a quality retirement.
Rather than giving up the idea of retirement all together, the following suggestions may provide alternatives:
1. Prioritize. What is important to you in your life? Keep that list as simple and as clear as possible. The more simple the list, the easier it will be to make it happen.
2. Do the math. You might need to downsize your home instead of keeping one that is taking up too much of your current monthly income. The smaller the house, the smaller the mortgage, the less you will pay for utilities, repair, upkeep, furnishings and insurance. This "newfound" money can be put to use elsewhere in your plan.
3. Review the options of relocating. Moving to a tax-friendly state or to a state or country where the cost of living is less than where you are living now is worth your consideration. Taxes and the daily cost of living play a huge part in the amount of money one will need for retirement.
4. Consider other work possibilities. If the idea of retiring fully frightens you, consider working part time, cutting back the hours at your current job, doing consulting work, or starting a second career. You'll still earn income, but you may not have the same work demands of your current job. You may want to work from your home or make money from your hobby. Even a little bit of income can go a long way in stretching your retirement dollars. Exchange services with neighbors or friends, and check out places like Craigslist for how you can exchange services with your community.
5. Streamline. Examine recurring monthly expenses in a new light. Items such as having a landline and a cell phone plan at the same time can add up. Do you need more than basic cable? Review your insurances and keep them up to date. You may be paying for more than you need.
6. Track your expenses. Before you retire, track your expenses for two years. If you are already retired, begin tracking them now. Find out where your money is going. You may be surprised to find places in your budget where you can live without that expense. Are you paying for storage you don't need or use? Do you have an extra car when you can get by with one? Are you paying for a boat slip or boat insurance that is no longer really necessary? Perhaps you can replace a gym membership with outdoor exercise or substitute DVDs from the library for your weekly movie treat.
7. Pay down debt. After tracking your spending, streamlining your monthly expenses, and possibly downsizing your home, use this newly discovered cash to pay down debt. Seriously weigh the idea of being mortgage free, or not maintaining a car loan. You'll be in a far better position to retire comfortably if you are not lugging the burden of unnecessary debt into your future plans.
8. Make your dream yours. Give your dreams substance. Don't hide in a holding pattern or delay striving for your ideal future "until things get better." Know what motivates you toward your dreams, and write them down. Post them up and keep them in mind every time you get the urge to give up, or when your interest flags.
If you create a personal relationship with your particular bright future, then no one can take it from you. If you know why your dreams are important to you, it will put power behind figuring out how to achieve them. Don't let anyone drive a wedge between you and your dream.
In short, we recommend being flexible and creative in describing your retirement dream. Open up to possibilities that you may not have considered before. Join online forums on topics of interest to you to find community and become self-reliant in creating the retirement best suited for you.
You may not be able to control the markets, but look to what is within your power to change and improve: Your own circumstances.
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Fool contributors Billy and Akaisha Kaderli write regularly for Rule Your Retirement. They retired in 1991 from the brokerage and restaurant businesses to a life of international travel. Visit their website at RetireEarlyLifestyle.com, and check out their new CD book, The Adventurer's Guide to Early Retirement. The Fool has a disclosure policy.